1 00:00:00,320 --> 00:00:02,960 Speaker 1: AT and T trading high today as it says they 2 00:00:03,000 --> 00:00:06,800 Speaker 1: see sustained profit growth over the next three years, including 3 00:00:06,880 --> 00:00:10,040 Speaker 1: double digit gains in twenty twenty seven. This is the 4 00:00:10,039 --> 00:00:12,719 Speaker 1: company is really doubling down on its fiber rollout as well. 5 00:00:12,720 --> 00:00:14,680 Speaker 1: I'm pleased to say for more. The AT and T 6 00:00:14,800 --> 00:00:19,760 Speaker 1: CEO John Stankey joins us now from your own named stadium. John, 7 00:00:20,120 --> 00:00:23,040 Speaker 1: let's talk a little bit about twenty twenty nine. You're 8 00:00:23,040 --> 00:00:27,200 Speaker 1: expecting to have fifty million plus total locations with fiber. 9 00:00:27,640 --> 00:00:30,400 Speaker 1: Why this big fiber focus? How do you get there? 10 00:00:31,200 --> 00:00:33,960 Speaker 2: Well, look, we've had great success with what we've built 11 00:00:34,040 --> 00:00:37,519 Speaker 2: thus far, and we see customers, first of all, love 12 00:00:37,560 --> 00:00:40,840 Speaker 2: the product, they stay with us longer, they drive better 13 00:00:40,920 --> 00:00:43,720 Speaker 2: value into the business. We're having great success at selling 14 00:00:43,760 --> 00:00:47,440 Speaker 2: multiple products into fiber households. Four out of every ten 15 00:00:47,920 --> 00:00:51,160 Speaker 2: of our fiber subscribers also subscribe to our wireless service 16 00:00:51,200 --> 00:00:54,480 Speaker 2: today and that's getting higher. And when you think about 17 00:00:54,520 --> 00:00:57,400 Speaker 2: where technology is going in the future, workloads are only 18 00:00:57,400 --> 00:01:00,280 Speaker 2: going to go up. We expect data consumption is going 19 00:01:00,320 --> 00:01:02,880 Speaker 2: to increase about eighty percent over the next five years. 20 00:01:03,480 --> 00:01:05,880 Speaker 2: In Fiber is the one that can do that. It's 21 00:01:05,880 --> 00:01:09,160 Speaker 2: the one that has the symmetrical bandwidth characteristics that will 22 00:01:09,200 --> 00:01:13,320 Speaker 2: facilitate AI and sending more data up into a network 23 00:01:13,400 --> 00:01:17,479 Speaker 2: than what comes down, which is traditionally how broadband networks 24 00:01:17,520 --> 00:01:19,920 Speaker 2: are built today, and we think that's a great investment 25 00:01:19,920 --> 00:01:20,640 Speaker 2: for the law Hault. 26 00:01:20,959 --> 00:01:23,720 Speaker 1: John, Just as you speak, we've got some breaking international news. 27 00:01:23,720 --> 00:01:25,720 Speaker 1: We've just got to bring our viewers of South Korean 28 00:01:25,800 --> 00:01:30,040 Speaker 1: lawmakers voting to request lifting martial law. We will bring 29 00:01:30,080 --> 00:01:32,080 Speaker 1: you up to the moment news. But at South Korean 30 00:01:32,120 --> 00:01:36,240 Speaker 1: National Assembly Speaker Wo is saying they will protect democracy. John, 31 00:01:36,319 --> 00:01:38,319 Speaker 1: we return to you and a US focus and a 32 00:01:38,360 --> 00:01:41,760 Speaker 1: business that you are currently wanting to see, really the 33 00:01:41,800 --> 00:01:46,399 Speaker 1: bandwidth and the broadband and the infrastructure play that you're offering. 34 00:01:46,680 --> 00:01:50,000 Speaker 1: What's interesting is the way that you're fueling investment in 35 00:01:50,080 --> 00:01:53,160 Speaker 1: fiber in particular is by doing innovative partnerships like the 36 00:01:53,200 --> 00:01:56,600 Speaker 1: one with Blackrock. Do you need outside investment to commit 37 00:01:56,680 --> 00:01:58,240 Speaker 1: to this sort of infrastructure rollout? 38 00:01:59,320 --> 00:02:02,920 Speaker 2: Look, we have a great portfolio of options. We primary 39 00:02:03,040 --> 00:02:06,320 Speaker 2: portfolio play is owned and operated where we take one 40 00:02:06,360 --> 00:02:09,200 Speaker 2: hundred percent of the economics. We fund it, build it, 41 00:02:09,200 --> 00:02:12,280 Speaker 2: and operate it ourselves. But we also realize we're in 42 00:02:12,360 --> 00:02:16,000 Speaker 2: kind of a constrained window right now. Fiber is needed now, 43 00:02:16,400 --> 00:02:18,720 Speaker 2: there isn't going to be a window that's open for 44 00:02:18,760 --> 00:02:22,120 Speaker 2: a long period of time to do this work. Capital markets, 45 00:02:22,160 --> 00:02:24,880 Speaker 2: of course, private capital markets sometimes provide a little bit 46 00:02:24,880 --> 00:02:27,880 Speaker 2: of insulation that public markets won't, and in order to 47 00:02:27,919 --> 00:02:30,720 Speaker 2: make sure we keep our lead, will balance that portfolio 48 00:02:30,760 --> 00:02:34,399 Speaker 2: out and our relationship with Blackrock and our gigapower work 49 00:02:34,440 --> 00:02:37,000 Speaker 2: has been really effective. What we've proven in the market 50 00:02:37,480 --> 00:02:40,520 Speaker 2: is that we can operate outside of our traditional operating 51 00:02:40,600 --> 00:02:45,120 Speaker 2: territory just as effectively as we have in our home territory. 52 00:02:45,600 --> 00:02:47,919 Speaker 2: I think Blackrock as a partner, has viewed it as 53 00:02:47,960 --> 00:02:51,239 Speaker 2: being a really successful investment. They've been willing to put 54 00:02:51,280 --> 00:02:53,639 Speaker 2: more into it, and we expect we're going to continue 55 00:02:53,680 --> 00:02:55,840 Speaker 2: to use that as one of the tools to grow 56 00:02:55,880 --> 00:02:58,440 Speaker 2: our footprint over time to get past that fifty million 57 00:02:58,480 --> 00:02:59,200 Speaker 2: we're talking about. 58 00:02:59,280 --> 00:03:01,120 Speaker 1: And it's really interest and you brought up, of course, 59 00:03:01,160 --> 00:03:03,959 Speaker 1: AI and the demands there. In many ways, everyone's been 60 00:03:04,160 --> 00:03:06,839 Speaker 1: ringing the hands of the energy infrastructure needs and black 61 00:03:06,880 --> 00:03:09,440 Speaker 1: Croc sort of funding that infrastructure build out. But how 62 00:03:09,480 --> 00:03:12,880 Speaker 1: significant is the AI demand and the strains on what 63 00:03:12,919 --> 00:03:13,800 Speaker 1: you provide. 64 00:03:14,960 --> 00:03:18,320 Speaker 2: It's an interesting issue. I think actually power consumption is 65 00:03:18,360 --> 00:03:21,040 Speaker 2: going to be really important moving forward. That's one of 66 00:03:21,080 --> 00:03:25,280 Speaker 2: the things we're talking about today with our analysts and investors, 67 00:03:25,320 --> 00:03:27,720 Speaker 2: which is how do we shut down our century old 68 00:03:28,200 --> 00:03:32,480 Speaker 2: copper infrastructure and all the electronics and equipment that support 69 00:03:32,520 --> 00:03:34,880 Speaker 2: it that are really power hungry. And that's one of 70 00:03:34,920 --> 00:03:37,840 Speaker 2: the ways that getting more of this traffic over to fiber, 71 00:03:38,280 --> 00:03:41,760 Speaker 2: which is passive and uses a lot less power, that 72 00:03:41,800 --> 00:03:44,840 Speaker 2: we can actually help to offset some of the increase 73 00:03:44,920 --> 00:03:48,400 Speaker 2: of what data demand and AI will drive moving forward. 74 00:03:48,400 --> 00:03:51,480 Speaker 2: And we think that's a really important policy dynamic on 75 00:03:51,520 --> 00:03:54,240 Speaker 2: this look. I think there's going to be a lot 76 00:03:54,320 --> 00:03:56,280 Speaker 2: of issues that the country has to work through on 77 00:03:56,320 --> 00:04:00,600 Speaker 2: getting the power grid to support leadership and AI. It's 78 00:04:00,640 --> 00:04:03,160 Speaker 2: going to happen. Maybe it gets slowed down a little bit, 79 00:04:03,280 --> 00:04:05,560 Speaker 2: maybe there's a few bumps in the road, but what 80 00:04:05,680 --> 00:04:08,200 Speaker 2: we do know is that demand's going to be continuing 81 00:04:08,240 --> 00:04:08,760 Speaker 2: to go up. 82 00:04:09,480 --> 00:04:12,600 Speaker 1: Well, you're also talking to analysts and investors about today, 83 00:04:12,720 --> 00:04:16,320 Speaker 1: is how you're giving money back big returns investors, whether 84 00:04:16,360 --> 00:04:19,120 Speaker 1: you're doing it through driven in but also through buybacks 85 00:04:19,160 --> 00:04:22,160 Speaker 1: as well. Why have you chosen that angle? Now you've 86 00:04:22,160 --> 00:04:23,120 Speaker 1: paid down debt. 87 00:04:24,200 --> 00:04:27,280 Speaker 2: It's a good day when you're giving more back to shareholders. Look, 88 00:04:27,279 --> 00:04:30,160 Speaker 2: we feel very comfortable with our debt position that we're 89 00:04:30,200 --> 00:04:32,040 Speaker 2: going to arrive at in the middle of next year, 90 00:04:32,040 --> 00:04:35,640 Speaker 2: and that's why we're making this announcement today. First of all, 91 00:04:35,640 --> 00:04:38,120 Speaker 2: we did a really nice job of structuring our balance 92 00:04:38,160 --> 00:04:41,920 Speaker 2: sheet properly, so we've got really attractive interest rates on 93 00:04:41,960 --> 00:04:45,600 Speaker 2: our portfolio of debt. We've got it turned out that's 94 00:04:45,640 --> 00:04:48,640 Speaker 2: a really, frankly, a strategic asset. And the way it's 95 00:04:48,640 --> 00:04:51,880 Speaker 2: set up right now, and given that we're largely investing 96 00:04:52,000 --> 00:04:56,120 Speaker 2: organically in the business, reinvesting in our business like this 97 00:04:56,279 --> 00:04:59,279 Speaker 2: and getting our leverage structure the way it is, feels 98 00:04:59,320 --> 00:05:03,600 Speaker 2: very comfortable to us because every year we're reinvesting in capital, 99 00:05:03,680 --> 00:05:06,960 Speaker 2: reinvesting in assets that we hold. And frankly, when you 100 00:05:07,040 --> 00:05:08,200 Speaker 2: kind of look at some of the m and A 101 00:05:08,279 --> 00:05:11,880 Speaker 2: work we've done as we've restructured the business, we spun 102 00:05:11,960 --> 00:05:16,039 Speaker 2: out certain non strategic assets. We haven't really gone back 103 00:05:16,080 --> 00:05:19,479 Speaker 2: after the equity structure and reducing the share count outstanding, 104 00:05:19,560 --> 00:05:22,520 Speaker 2: and when the dividend yield is still over five percent, 105 00:05:22,600 --> 00:05:25,599 Speaker 2: we've got fantastic dividends coverage. This is an opportunity for 106 00:05:25,680 --> 00:05:27,920 Speaker 2: us to maybe balance that out a little bit and 107 00:05:28,360 --> 00:05:30,279 Speaker 2: bring a little bit of equity back in house. 108 00:05:30,560 --> 00:05:33,360 Speaker 1: Okay, let's talk about that changing over your own portfolio 109 00:05:33,360 --> 00:05:36,360 Speaker 1: of the assets you hold DirecTV moving away. I mean, 110 00:05:36,920 --> 00:05:41,000 Speaker 1: will we see that being integraled to these financial forecasts. 111 00:05:42,279 --> 00:05:44,880 Speaker 2: No, we've actually today as we sit down and talk 112 00:05:44,960 --> 00:05:49,520 Speaker 2: with the investment community, we'll be providing restated constructs under 113 00:05:50,279 --> 00:05:53,440 Speaker 2: ex Direct TV. Assuming that we're going to close up 114 00:05:53,480 --> 00:05:56,359 Speaker 2: by the middle of next year. We still see great 115 00:05:56,480 --> 00:05:59,719 Speaker 2: improvements in our cash flow. We'll expect that we'll probably 116 00:05:59,760 --> 00:06:02,239 Speaker 2: grow cash flow by about a billion dollars a year 117 00:06:02,760 --> 00:06:06,720 Speaker 2: even without direct TV. As we move through this planning process, 118 00:06:06,960 --> 00:06:10,320 Speaker 2: we see acceleration on our EPs, our ebit is going 119 00:06:10,360 --> 00:06:13,440 Speaker 2: to continue to grow. So, you know, Direct TV has 120 00:06:13,440 --> 00:06:16,159 Speaker 2: been really good. It's provided us a lot of cash coverage. 121 00:06:16,320 --> 00:06:18,640 Speaker 2: We did a really nice job of managing the asset 122 00:06:18,800 --> 00:06:22,080 Speaker 2: down to this point. It's time to focus on what 123 00:06:22,080 --> 00:06:24,560 Speaker 2: we're going to do moving forward, which is build a 124 00:06:24,560 --> 00:06:27,960 Speaker 2: world class connectivity business. And it's the right decision to 125 00:06:27,960 --> 00:06:28,720 Speaker 2: make at this point. 126 00:06:29,080 --> 00:06:31,400 Speaker 1: A lot of analysts are echoing that, and we are, 127 00:06:31,400 --> 00:06:34,159 Speaker 1: of course with John Sanky, the eight and TCO to 128 00:06:34,360 --> 00:06:39,000 Speaker 1: our worldwide radio and TV audiences. Many relieve that you're 129 00:06:39,000 --> 00:06:41,640 Speaker 1: getting back to what you do best, which is telecoms. 130 00:06:41,920 --> 00:06:46,000 Speaker 1: Within that though, is you know, some really clear clarity 131 00:06:46,240 --> 00:06:49,000 Speaker 1: being given on the numbers. You're getting forty billion dollar 132 00:06:49,000 --> 00:06:53,160 Speaker 1: plus of anticipate anticipated shareholder returns, fifty billion dollars plus 133 00:06:53,360 --> 00:06:56,320 Speaker 1: of financial capacity over the next three years. What are 134 00:06:56,320 --> 00:06:58,600 Speaker 1: the risks we're at this time of a new administration 135 00:06:58,720 --> 00:07:02,240 Speaker 1: coming in? They are a macro headwinds, global headwinds. Are 136 00:07:02,279 --> 00:07:03,480 Speaker 1: their risks to these numbers? 137 00:07:04,520 --> 00:07:07,400 Speaker 2: Well, I think every time there's an administration change, there's 138 00:07:07,480 --> 00:07:11,880 Speaker 2: usually a discussion about boy could change his negatively impacted business. 139 00:07:12,160 --> 00:07:13,760 Speaker 2: I mean a call four years ago, there was a 140 00:07:13,800 --> 00:07:16,040 Speaker 2: little bit of that narrative going on, and I think 141 00:07:16,080 --> 00:07:18,840 Speaker 2: we'd done just fine for the last four years. And frankly, 142 00:07:19,440 --> 00:07:22,120 Speaker 2: some of the things that I hear right now, tax policy, 143 00:07:22,320 --> 00:07:28,680 Speaker 2: possibly reinstituting accelerated depreciation, those things could be very very 144 00:07:28,720 --> 00:07:30,920 Speaker 2: good for our business. And in fact, when they were 145 00:07:30,960 --> 00:07:34,360 Speaker 2: in place and they weren't lapsing, we were investing at 146 00:07:34,400 --> 00:07:37,400 Speaker 2: a higher level. And so I think if this administration 147 00:07:37,680 --> 00:07:41,640 Speaker 2: incoming administration follows through on what they'd like to do, 148 00:07:41,680 --> 00:07:45,320 Speaker 2: which is to put pro investment policies in place for 149 00:07:45,560 --> 00:07:48,480 Speaker 2: the nations one of the nation's largest capital investors. That's 150 00:07:48,520 --> 00:07:50,160 Speaker 2: going to be a really good thing for us. So 151 00:07:50,280 --> 00:07:53,720 Speaker 2: we watched that carefully, certainly like everybody else. There's other 152 00:07:53,840 --> 00:07:55,880 Speaker 2: policies up in the air around tariffs and a few 153 00:07:55,880 --> 00:07:58,640 Speaker 2: other things that we're all kind of wondering what might 154 00:07:58,680 --> 00:08:02,400 Speaker 2: occur with that. I think same minds will prevail. I 155 00:08:02,400 --> 00:08:05,280 Speaker 2: think some of what we're hearing right now is directed 156 00:08:05,320 --> 00:08:08,280 Speaker 2: to make sure that we negotiate from a position of strength, 157 00:08:08,640 --> 00:08:11,200 Speaker 2: and we make sure that we respect the US market 158 00:08:11,360 --> 00:08:14,320 Speaker 2: as strong and as meaningful as it is, that people 159 00:08:14,360 --> 00:08:17,000 Speaker 2: should play on a fair and level playing field when 160 00:08:17,000 --> 00:08:19,640 Speaker 2: they gain access to it. And I'm hopeful that we'll 161 00:08:19,640 --> 00:08:22,320 Speaker 2: see good policy comes out that drives good investment and 162 00:08:22,360 --> 00:08:24,280 Speaker 2: good economic returns as a result. 163 00:08:24,840 --> 00:08:27,760 Speaker 1: Well, returns are up on your shares you're currently training 164 00:08:27,760 --> 00:08:30,480 Speaker 1: at the high since twenty twenty one. More broadly, do 165 00:08:30,520 --> 00:08:33,680 Speaker 1: you think that you can sustain this sort of growth we. 166 00:08:33,600 --> 00:08:36,079 Speaker 2: Do, Otherwise we wouldn't be out giving the three year 167 00:08:36,120 --> 00:08:39,120 Speaker 2: guidance that we're giving. We feel, first of all, strong 168 00:08:39,160 --> 00:08:42,679 Speaker 2: and the fundamentals consumers need to use more Internet. They 169 00:08:42,720 --> 00:08:46,440 Speaker 2: need to get higher performance networks to support that. That's 170 00:08:46,480 --> 00:08:48,920 Speaker 2: the business we're in, and we're going to talk a 171 00:08:48,920 --> 00:08:51,559 Speaker 2: little bit this afternoon with our investors about our ability 172 00:08:51,600 --> 00:08:54,960 Speaker 2: to manage the cost structure in dealing with that accelerating 173 00:08:55,000 --> 00:08:58,320 Speaker 2: and increased growth so that as customers use more that 174 00:08:58,400 --> 00:09:01,079 Speaker 2: we can ultimately drop more cash to the bottom line. 175 00:09:01,440 --> 00:09:04,640 Speaker 2: And that growth dynamic of us getting more efficient people 176 00:09:04,720 --> 00:09:06,920 Speaker 2: using more of the product, we think that's going to 177 00:09:06,920 --> 00:09:09,360 Speaker 2: sustain itself over the next three years, and that's why 178 00:09:09,400 --> 00:09:10,840 Speaker 2: we gave the guidance that we gave. 179 00:09:11,760 --> 00:09:15,199 Speaker 1: We so appreciate you coming live at and T Stadium 180 00:09:15,240 --> 00:09:17,920 Speaker 1: over in Texas. Johns Thanky at and T cdo